Guardianship and financial administration orders

6.5          Laws and legal frameworks for guardianship and financial administration are the responsibility of the states and territories. Every state and territory has a relevant tribunal and a statutory body that constitutes the guardian or administrator of last resort—appointed where the tribunal considers that a person requires a guardian or administrator but there is no other suitable person that is willing or able to fulfil the appointment.[1]

6.6          Guardianship and financial administration, also referred to as ‘financial management’ orders, are orders of a court or tribunal which confer guardianship or financial administration over a person with diminished decision-making ability, usually for a set period of time.[2] Guardianship orders refer to the transfer of decision making for a person’s health and wellbeing from the person to another person or to the public guardian. Guardianship orders are usually limited to decision making in certain areas of a person’s life, although they can be plenary to provide for unlimited decision making related to the health and wellbeing of the person.

6.7          An order for the financial administration of a person’s property grants power to an administrator to conduct certain types of transactions on behalf of the person. A financial administration order may include the requirement to receive directions from the state trustees.[3] Financial administrators are generally required to submit a financial management plan, keep records of financial transactions, and lodge accounts annually with tribunals or state trustees, depending on the state or territory. Financial administrators can be professional accountants, trustee companies, state trustees or equivalent, or non-professional persons.[4]

6.8          There are various eligibility criteria of which the tribunal needs to be satisfied before a non-professional person is appointed guardian or financial administrator. For example, in NSW, the tribunal must be satisfied that the proposed guardian is compatible with the person; has no undue conflicts; and is willing and able to perform the functions of guardian.[5] There are similar criteria for guardian appointments in other states and territories.[6] 

6.9          Some states require the financial administrator to be a ‘suitable person’, or to demonstrate sufficient expertise, knowledge or competency before an appointment is made.[7]

6.10       Guardians and financial administrators are generally obliged to act in the ‘best interests’ of the person, with reference to statutory guiding principles to observe the interests, freedom, participation and family life of the person, and to protect the person from abuse.[8] There are some statutory provisions preventing financial administrators from conducting conflict of interest transactions, or combining or using the estate to their own benefit.[9] 

6.11       An appointment may be revoked by the tribunal where:

  • the enduring guardian, attorney under power or tribunal-appointed guardian or administrator (appointee) requests a revocation of the appointment;[10]

  • the appointee has died;

  • it is alleged that at the time of making the enduring instrument the person lacked the legal capacity to do so;[11] or

  • it is alleged the appointee is not meeting their obligations under the relevant act.[12]